KARACHI - The success of micro-finance institutions around the globe has established that it could make an important contribution in improving the socio-economic conditions of the poor. All stakeholders of micro-finance industry in the country need to realise that micro-finance is but one element of a comprehensive strategy to combat poverty. Interventions based on this can indeed lead to poverty alleviation, at macro scale, reports SBP publication, 'Towards Achieving Social and Financial Sustainability: A study on the performance of micro-finance in Pakistan. The survey results revealed that the availability of loan had a partial impact to reduce the incidence of child labour. Though respondents expressed rise in their income levels as a result of availing the loan but it alone did not serve as a universal remedy to fully convince parents to take their children out of work. Despite a limited impact the data also indicates that in certain cases micro-finance interventions did lead to improvement in the clients socio-economic condition by enabling them to take their children out of work and put them into school. As many as 62.9 percent of parents indicated that an increase in family income helped them send their children to school and 62.3 percent said it helped them withdraw their children from work and send them to school. Most of the respondents reported a positive relation between income generated through micro credit interventions and childs school education. However this is not always the case unless financial measures are supported by additional services like free non-formal/formal education for children, provision of free health services and extensive social mobilisation of the families against child labour. Thus it is difficult to infer that micro finance interventions alone can enable families to reject child labour and send their children to school, asserts the report. Responding to the positive initiatives of government and the central bank, micro-finance industry has grown at a significant pace. However, it is able to cater to only 4 percent of the potential market. Both at the government and private level, there is a need to increase participation to reach out to the 25 to 30 million potential clients of micro-finance. The report genuinely believes, like other social impacts of micro-finance, women empowerment cannot be quantified, however an increase in number of female clients can be an indicator of rising awareness among female clients. It is to be noted that according to the field officers, especially of unregulated sector, women are better clients as compared to their male counterparts. This observation is consistent with the anecdotal argument of women being better clients with reference to recovery of loans. However, this practice is not being discouraged because, a majority of the interviewed field officers are of the view that this practice does not neutralise the objectives of micro-finance i.e. socio-economic uplift of the poor. Since majority of the unregulated sector (surgical instruments manufacturing, glass bangle and deep-sea fishing) projects covered in the survey were related to bonded labour, respondents were specifically questioned about the impact of micro-finance on child labour. The survey findings highlight lack of product diversification as one of the major impediments in increasing outreach and attaining sustainability. Micro credit is the major service being provided in the country under the umbrella of micro-finance. This calls for research and innovation on the product development side. Field survey has revealed that the main concern of micro-finance clients is access to credit rather than interest rate. A common condition of all micro-finance institutions for loan acquisition is client having the National Identity Cards (NIC), which restricts enrolling more clients since a significant number of people, particularly women, do not possess these. This issue can be resolved by the use of latest Information communication technologies as has been done in other developing countries or by facilitating the potential clients acquiring the NIC. It can also be concluded through survey results that a major apprehension of micro-finance clients is the lower loan amount and the condition of group formation. However micro-finance institutions have now started offering individual loans as a response to clients demand. It is critically important for all micro-finance institutions in the country to improve on the efficiency frontiers and utilise better management information systems. Competition in the market can be an effective impetus for attaining efficiency and sustainability. For a meaningful linkage between the major players of the market and to mitigate the increasing credit risk in micro-finance, SBP in collaboration with international experts has started working on Credit Information Bureau (CIB). Consumer protection requires micro-finance products to completely disclose the interest rate mechanism and all terms and conditions of the contract. SBP has been working on consumer protection since 2006 and has made it mandatory for MFBs to follow the Trust in Lending principle.